Avista Posts Strong Quarterly Earnings

Avista Corp. reported sharply higher third-quarter earnings Tuesday, mostly on the strength of revenues from a subsidiary’s asset sale.

Net income available for common stock for the three months ended Sept. 30 was $22.3 million, or 52 cents per diluted share, on revenues of $3.7 billion.

Last year, the company earned $8 million, or 14 cents per share, on revenues of $1.43 billion.

Income for common stock is reported after deducting payments to preferred stockholders. Those dividends have jumped in the latest year with the issuance of a new series of convertible preferred shares.

For the year so far, Avista has income for common stock of $39.4 million, or 98 cents per share, on revenues of $6.37 billion.

Net for common stock for the same period in 1998 was $54.4 million, or 97 cents per share, on revenues of $2.7 billion.

Pentzer Corp., the holding company for Avista’s non-energy assets, contributed $26.8 million, or 55 cents per diluted share, to the parent company’s bottom line.

In September, Pentzer sold one of its major holdings, the Store Fixture Solutions Group. The deal helped the subsidiary generate $65 million in cash during the quarter.

Chairman Tom Matthews said Avista’s energy trading operations also produced positive returns for the quarter after dragging down performance for the two previous quarters.

And while Avista Advantage showed a loss, he noted the company now serves 50,000 sites, a threshold officials did not expect to meet before year end.

Avista Advantage provides energy services over the Internet to customers such as Starbucks, AT&T and the U.S. Postal Service.

Avista Utilities reported a rare loss for the quarter, traditionally the slowest for energy sales. The results were caused by a combination of low streamflows and purchases of high-cost power to make up for the loss of hydropower.

Lisa Sroufe, an analyst for Ragen MacKenzie Inc. in Seattle, said the company had purchased power anticipating demand for air-conditioning this summer, which turned out to be cooler than normal.

Then the company had to buy additional supplies when stream levels fell.

Sroufe called the results disappointing but not indicative of long-term problems.

Avista repurchased 5 million of its shares - 9 percent of the total outstanding - during the quarter. The board has authorized a 10 percent buyback, and Vice President David Brukardt said the program could be extended.

In other reports Tuesday:

Cavanaughs Hospitality of Spokane posted lower-than-expected third quarter earnings of 31 cents a share, compared to 32 cents in the same period last year.

Analysts polled by First Call, a New York-based data service, earlier in the quarter had projected the hotel and entertainment company would report earnings of 38 cents a share.

Total revenues for the three months ended Sept. 30 were $33.8 million - a record high for Cavanaughs - compared with $27.6 million last year. But quarterly net income fell to $3.9 million, down 4.8 percent from $4.1 million last year.

Cavanaugh’s revenue per available room, a key measure in the hotel industry, increased slightly during the quarter - $52.71 per room vs. $52.12 last year.

Revenues still are hindered by its acquisition of the Olympus Hotel in Salt Lake City. The hotel accounts for 10 percent of the company’s rooms.

“We weren’t aware it was going to be this much of a pain cycle in downtown Salt Lake,” Don Barbieri, CEO of Cavanaughs, said in a conference call with analysts.

Roads near the hotel, including a freeway off-ramp that takes traffic into downtown, had recently been closed during extensive renovation.

Cavanaughs said it plans to trim administrative costs in the fourth quarter. And the company continues to negotiate purchase agreements on other hotels in the Interstate-5 corridor.

The entertainment business, TicketsWest.com, is expanding in Colorado and in the Northwest following two recent acquisitions.

Compaq Computer Corp., coming off an executive shakeup and more than 7,000 job cuts, reported flat operating profits in the third quarter on Tuesday that beat analysts’ expectations. But revenue fell 2 percent from the second quarter as the company lost its U.S. leadership in personal computer sales.

Online auction house eBay Inc. reported its third-quarter operating profits beat Wall Street expectations as new partnerships and expanded auction offerings such as cars and art led to a sharp increase in its registered users.

DaimlerChrysler AG surprised Wall Street analysts Tuesday with third-quarter earnings well above expectations, thanks to vigorous sales of Chrysler trucks and Mercedes-Benz luxury cars.

Staff writer Mike Roarke and The Associated Press contributed to this report.